An Anatomy of Failure – Wind Power Development in China

PublikationArtikel (med peer review)
China, Jonas Grafström, Miljöekonomi, Wind power


China is currently the world’s largest installer of wind power. However, with twice the installed wind capacity compared to the United States in 2015, the Chinese produce less power. The question is: Why is this the case? This article shows that Chinese grid connectivity is low, Chinese firms have few international patents, and that export is low even though production capacity far exceeds domestic production needs. Using the tools of Austrian economics, China’s wind power development from 1980 to 2016 is documented and analyzed from three angles: (a) planning and knowledge problems, (b) unproductive entrepreneurship, and (c) bureaucracy and government policy. From a theoretical standpoint, both a planning problem and an entrepreneurial problem are evident where governmental policies create misallocation of resources and a hampering of technological development.

Grafström, J. (2021). An Anatomy of Failure – Wind Power Development in China. Quarterly Journal of Austrian Economics, 24(2), 317-347.

Liknande innehåll

Government Support to Renewable Energy R&D: Drivers and Strategic Interactions among EU Member States
Artikel (in press)Publikation
Grafström, J., Söderholm, P., Gawel, E., Lehmann, P., & Strunz, S.



Although the climate challenge requires proactive policies that spur innovation in the renewable energy sector, various countries commit vastly different levels of support for renewable energy R&D. This paper addresses the question why this may be the case. Specifically, the objective is to analyse the determinants of government support to renewable energy R&D in the European Union (EU), and, in doing this, we devote particular attention to the question of whether the level of this support tends to converge or diverge across EU Member States. The investigation relies on a data set of 12 EU Member States and a bias-corrected dynamic panel data estimator. We test for the presence of conditional β-convergence, and the impacts of energy dependence and electricity regulation on government R&D efforts. The findings display divergence in terms of government support to renewable energy R&D, and this result is robust across various model specifications and key assumptions. The analysis also indicates that countries with a low energy-import dependence and deregulated electricity markets tend to experience lower growth rates in government renewable energy R&D. The paper ends by discussing some implications of the results, primarily from an EU perspective.

Is China different? A meta-analysis of China’s financial sector development
Artikel (med peer review)Publikation
Ljungwall, C., & Gustavsson Tingvall, P.



We examine whether China has benefited more from financial development than other countries. The results show that financial development has been less significant for growth in China than in other countries, even when China is compared with other transition economies.

Working paper No. 301: Convergence of Incentive Capabilities within the European Union
Working paperPublikation
Grafström, J.


Publicerat i

Ratio Working Paper


The development of a single economic market and rapid technological advances in the European Union (EU) have resulted in its Member States undergoing major structural changes over the past few decades. The purpose of this paper is to analyse whether or not there is convergence in the inventive capabilities across the EU. This is done by econometrically investigating, by means of parametric and non-parametric techniques, the development of patents granted per capita in 13 Member States per capita during the period 1990–2011. The findings of several β-convergence and σ-convergence tests show convergence in inventive capabilities. Moreover, a similar result is obtained when analysing the distributional dynamics of the invention capabilities. The speed of convergence is however slow. This suggests that policy efforts implemented by the EU to reduce technological gaps among its Member States have been relatively insufficient, and may imply negative long-term consequences for EU cohesion.

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